Kotler / Armstrong, Chapter 10 _____ is the sum of values that consumers exchange for the benefits of having or using a product or service. 1.Place 2.Purchase

Kotler / Armstrong, Chapter 10

_____ is the sum of values that consumers exchange for the benefits of having or using a product or service.

1. Place

2. Purchase

3. Price

4. Premium


_____ is the sum of values that consumers exchange for the benefits of having or using a product or service.

1. Place

2. Purchase

3. Price

4. Premium


Setting your price based on your customer’s perception of value rather than on your cost is called __________ pricing.

1. value-based

2. cost-based

3. price-based

4. demand-based


Setting your price based on your customer’s perception of value rather than on your cost is called __________ pricing.

1. value-based

2. cost-based

3. price-based

4. demand-based


Fixed costs (overhead) plus variable costs equals _______ costs.

1. semi-variable

2. equilibrium

3. total

4. semi-fixed


Fixed costs (overhead) plus variable costs equals _______ costs.

1. semi-variable

2. equilibrium

3. total

4. semi-fixed


The addition of a standard markup to the cost of your product is the simplest pricing method referred to as _______ pricing.

1. cost-plus

2. markup-plus

3. price-plus

4. elasticity


The addition of a standard markup to the cost of your product is the simplest pricing method referred to as _______ pricing.

1. cost-plus

2. markup-plus

3. price-plus

4. elasticity


One problem with pricing is that managers are often too quick to reduce their price, rather than to convince their buyers that their product is worth the higher cost.

1. true

2. false


One problem with pricing is that managers are often too quick to reduce their price, rather than to convince their buyers that their product is worth the higher cost.

1. true

2. false


Which of the following is not an internal factor affecting pricing?

1. marketing objectives

2. marketing mix strategy

3. costs

4. competition


Which of the following is not an internal factor affecting pricing?

1. marketing objectives

2. marketing mix strategy

3. costs

4. competition


A product high in quality and available in a limited number of outlets will probably have a _____.

1. high price

2. low price

3. discounted price

4. rebate included


A product high in quality and available in a limited number of outlets will probably have a _____.

1. high price

2. low price

3. discounted price

4. rebate included


Target costing involves designing a new product, determining its cost, and then asking, “Can we sell it for that?”

1. true

2. false


Target costing involves designing a new product, determining its cost, and then asking, “Can we sell it for that?”1. true2. false (Target costing starts with setting an

ideal price based on customer considerations, then targets the costs to see that the price is met.)


_____ costs do not vary with production or sales level.

1. Variable

2. Fixed (overhead)

3. Total

4. Value


_____ costs do not vary with production or sales level.

1. Variable

2. Fixed (overhead)

3. Total

4. Value


The _____ shows the drop in average costs with accumulated production experience.

1. learning curve

2. demand curve

3. cost curve

4. supply curve


The _____ shows the drop in average costs with accumulated production experience.

1. learning curve

2. demand curve

3. cost curve

4. supply curve


Total revenue equals total cost at break-even.

1. true

2. false


Total revenue equals total cost at break-even.

1. true

2. false


Which type of market consists of many buyers and sellers who trade over a range of prices rather than a single market price?

1. pure competition

2. monopolistic competition

3. oligopolistic competition

4. pure monopoly


Which type of market consists of many buyers and sellers who trade over a range of prices rather than a single market price?

1. pure competition



4. pure monopoly


Which type of market has few sellers who are very sensitive to each other’s prices?

1. pure competition



4. monopoly


Which type of market has few sellers who are very sensitive to each other’s prices?

1. pure competition



4. monopoly


A(n) _____ curve shows the number of units the market will buy in a given time period at different prices that might be charged.

1. demand

2. elastic

3. experience

4. supply


A(n) _____ curve shows the number of units the market will buy in a given time period at different prices that might be charged.

1. demand

2. elastic

3. experience

4. supply


If demand changes greatly with a small change in price, we say the demand is _____.

1. inelastic

2. elastic

3. sensitive

4. reversed


If demand changes greatly with a small change in price, we say the demand is _____.

1. inelastic

2. elastic

3. sensitive

4. reversed


Which of the following is(are) not an external consideration when setting prices?

1. costs

2. federal government

3. social responsibility

4. resellers


Which of the following is(are) not an external consideration when setting prices?

1. costs

2. federal government

3. social responsibility

4. resellers


If a reseller buys a product from a manufacturer for $20 and wants to mark it up 50 percent, what will the new price be?

1. $30

2. $40

3. $25

4. none of the above


If a reseller buys a product from a manufacturer for $20 and wants to mark it up 50 percent, what will the new price be?

1. $30

2. $40 (markup price = unit price/[1-desired return on sales])

3. $25

4. none of the above


What is the break-even unit volume for a company with fixed costs of $50k, variable costs of $20, and a price of $30/unit?

1. 500

2. 1000

3. 5000

4. 2500


What is the break-even unit volume for a company with fixed costs of $50k, variable costs of $20, and a price of $30/unit?

1. 500

2. 1000

3. 5000 (BE volume = FC/[price–VC])

4. 2500


Value-based pricing uses the buyer’s perception of value to set prices.

1. true

2. false


Value-based pricing uses the buyer’s perception of value to set prices.

1. true

2. false


According to the text, competition-based pricing is popular in _______ markets.

1. pure competition

2. monopoly




According to the text, competition-based pricing is popular in _______ markets.

1. pure competition

2. monopoly



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Kotler / Armstrong, Chapter 10 _____ is the sum of values that consumers exchange for the benefits of having or using a product or service. 1.Place 2.Purchase